The economy suffered a mild recession in 2001. Despite the recession, home sales and durable goods sales remained high. Which of the following is a plausible explanation?
A) The Fed caused a reduction in the federal funds rate to its lowest level in 40 years.
B) Home building and consumer durable purchases are always high during a recession.
C) Rising inflation encouraged many to invest in the real estate market.
D) The Fed's pursuit of contractionary policy stimulated these markets.
A
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Figure 6.3 shows the cost structure of a firm in a perfectly competitive market. If the market price is $3 and the firm shuts down in the short run, its profit is:
A. -$300. B. -$600. C. -$900. D. -$1,200.
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow.
Figure 6.2Refer to Figure 6.2. Mr. Lingle's budget constraint is AC. Point E is
A. not in Mr. Lingle's opportunity set but is on his budget constraint. B. an available option and Mr. Lingle exactly spends all of his income. C. an available option and Mr. Lingle does not spend all of his income. D. not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
Refer to the information provided in Figure 3.2 below to answer the question(s) that follow.
Figure 3.2Refer to Figure 3.2. Which of the following would be most likely to cause the demand for macaroni and cheese to shift from D0 to D1?
A. a decrease in income, assuming macaroni and cheese is a normal good B. an increase in the price of flour used to make macaroni and cheese C. a decrease in the price of macaroni and cheese D. an increase in the quantity demanded for macaroni and cheese
Suppose the economy has a recessionary ga
A) raise real GDP without increasing the price level. B) raise real GDP and the price level. C) raise the price level alone, but cannot increase real GDP. D) raise real GDP and decrease the price level.